The record industry has been targeting online music sharing for years, but now it has undertaken a new war - against ‘casual piracy.’

Sony BMG and EMI have begun shipping compact discs in the US using technology that limits the number of copies you can make of any disc to three. And you can’t port songs from affected CDs to Apple IPod players unless you request a workaround from Sony.

While copy protected CDs have only been released in the US and for a limited number of artists, other countries, including the UK, are also rumoured to be starting trials soon.

The move could have a lasting impact on your entertainment choices. And you may not like the remix.

Sony BMG’s copy-protected CDs incorporate First 4 Internet’s XCP2 (extended copy protection) technology. The company is the first major label to offer XCP2-protected CDs to consumers, although Sony BMG already ships some CDs using MediaMax copy protection from SunnComm.

The new effort uses different technology, but with the same end result for consumers: a limited ability to copy.

“Our goal is to create a series of speed bumps that make it clear to users that there are limits [to copying],” says Thomas Hesse, president of Sony BMG’s Global Digital Business Group. “If you attempt to burn 20 copies and distribute them to all of your friends, that’s not appropriate.”

Sony BMG labels discs that use the technology as copy-protected. The company says that its customers find a limit of three copies to be fair.

When you insert the CD into your Windows-based computer, the disc launches its own audio player software, which warns you that you’ll be allowed to make only three copies of the disc.

You can make those copies from within the Sony BMG audio player, or you can use that software to rip the files to your music library.

The copy protections are not iron-clad, however: you can make three copies of the CD on each PC on which you load it. You can also make three additional copies of the CD from the tracks that you have ripped to your Windows Media Player library.

Once you have burned CDs using Windows Media Player, the tracks cease to be protected, and you can upload this audio CD into another media player, such as ITunes. And once the tracks are uploaded, you can burn them as often as you like.

One potential problem for consumers is that the protected CDs prevent PC users from moving songs to Apple IPods. That’s because Apple refuses to licence its FairPlay digital rights management technology so that other companies can accommodate it. If you inquire, though, Sony BMG will e-mail you a workaround.

This raises a key point about XCP2: it’s not meant to be unbreakable, according to First 4 Internet’s chief executive Mathew Gilliat-Smith. “We have achieved a good balance of protection and playability.”

In fact, XCP2 is not as strict as XCP, the company’s original product. Sony BMG and the other major labels have been using XCP since 2002 on pre-release CDs sent to radio stations and internal employees, Gilliat-Smith says. XCP not only prevents copying, but in some cases prevents discs from playing in certain devices, he says. Sony chose XCP2, not XCP, for consumer CDs because discs with that encryption play well in most devices.

XCP2 may affect more than just CDs: the company is currently working on versions for DVDs and online music files, Gilliat-Smith says. Sony BMG will ship the DVD technology to US film studios for use in pre-release copies of films by late 2005, he hopes, and will introduce a version for commercial DVDs later. He declines to say which film studios have expressed interest in using the technology.

So what’s next? Like it or not, copy protection on CDs will only increase, in the opinion of IDC senior analyst Susan Kevorkian. She expects that more companies will follow Sony BMG’s lead. “There’s a very narrow line between casual copying and proliferation of content online,” she says.